Rox Resources rides its nickel boom

Rox Resources
can’t say it has matched the success of Sirius Resources yet, but it can count itself as another Perth company enjoying a stellar stockmarket run after making a new nickel discovery in Western Australia.

Rox shares have soared from less than 2¢ to 7¢ since it announced encouraging preliminary results from its Mount Fisher project in the WA goldfields, indicating nickel sulphide mineralisation, the week before Christmas.

Although the nickel price is in the doldrums and nickel producers are on the nose with investors, the rarity of new nickel sulphide discoveries has helped drive the share price performance of Sirius and Rox.

They are certainly nowhere near as common as gold discoveries these days, especially in mature mining provinces such as WA.

Rox bought Mount Fisher from Alacer Gold in 2011 for an initial payment of 20 million shares, viewing it primarily as a gold exploration project. More shares are payable to Alacer if a certain-sized gold resource is identified.

At the time of the purchase, Rox was aware of the geological structure where the nickel hits have been returned. But it wasn’t until aerial electromagnetic surveying was carried out last year that drill targets were identified.

First pass reconnaissance drilling conducted prior to Christmas at the behest of the company’s geologists produced promising signs, with confirmation of the results expected by the end of the month.

Provided the results show the deposit is real, Rox will need to raise more capital for further drilling. It envisages sinking four or five diamond drill holes in February and running a rolling drilling campaign from there on.

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Prior to the Mount Fisher nickel discovery, Rox management were pleased with the company’s position from a technical perspective.

They had proved up a small gold resource at Mount Fisher; attracted Teck Resources as a farm-in partner on the Myrtle-Reward zinc project in the Northern Territory; and farmed into the Bonya copper prospect, also in the NT.

But like most other junior explorers, its shares were languishing and market capitalisation was just $8 million. Now at least there is light ahead.

Former Woodside Petroleum executive Eve Howell has achieved a lot in the three months since she took over as chairman of oil and gas junior
Tangiers Petroleum
. But really she’s just getting started.

When Howell joined Tangiers in September, it had expenditure commitments of more than $70 million on projects in Morocco and Australia and less than $1 million in available cash.

But she has been able to negotiate farm-out deals for both the Moroccan and Australian projects, relieving it of most of its capital obligations and adding $15 million to the kitty.

These funds are expected to be directed towards new projects, with Howell set to step up her search for onshore and shallow water opportunities in Africa this year. She is opting to steer clear of deep water exploration, recognising that the large amounts of capital required mean it is better left to the big guys.

If a suitable project is found, Tangiers is likely to look at a capital raising to supplement its own cash reserves but is under no pressure to do so otherwise.

In early December the company struck a deal with Portugal’s Galp Energia to take on spending commitments of up to$33 million on its offshore Tarfaya block in Morocco and refund past costs of $7.5 million.

On the same day, Tangiers announced a heads of agreement for ASX-listed CWH Resources to farm into two blocks in the waters off Western Australian and the Northern Territory.

Under the agreement, CWH will fund the first $35 million of exploration expenditure on the blocks, which is expected to cover commitments to 3D seismic acquisition and two wells.

The Tangiers share price climbed steadily after Howell’s appointment and peaked at 45¢ in November, reflecting the market’s high opinion of her.

But the stock has come under pressure recently with a broking house understood to be advising clients to sell out for unknown reasons. It closed at 34¢ yesterday.